Karachi: The UBL Pakistan Enterprise Exchange Traded Fund (UBLP-ETF), launched on March 24, 2020, has demonstrated a robust performance against its benchmark index, reflecting significant growth despite the high risk of principal erosion associated with its investments. The fund, categorized as an Exchange Traded Fund and characterized by its open-end nature, aims to deliver long-term capital appreciation and dividend yields to investors.

For the fiscal year-to-date (FY-YTD) leading up to January 2025, UBLP-ETF reported a commendable performance with returns of 41.88%, closely trailing the benchmark’s 45.58% return. In January 2025 alone, UBLP-ETF achieved a return of 4.04%, slightly below the benchmark’s 4.20%. The fund has maintained a strong compound annual growth rate (CAGR) since its inception at 27.33%, compared to the benchmark’s 30.44%.

According to information available from the Pakistan Stock Exchange (PSX), UBLP-ETF’s fund size grew from 69.00 million PKR in December 2024 to 72.00 million PKR in January 2025, representing an increase of 4.76%. The Net Asset Value (NAV) also rose from 23.5763 PKR to 24.5289 PKR, marking a growth of 4.04%. The fund is managed by Mubashir Anis, CFA, an equity specialist, who oversees its operations.

The fund’s asset allocation heavily favors equities, with 95.96% of total assets invested in this segment as of January 2025, up from 94.64% in December 2024. Cash and other assets constitute 2.50% and 1.55% of the total assets, respectively. The top ten equity holdings include major companies such as United Bank Ltd., Fauji Fertilizer Co. Ltd., and Engro Fertilizers Ltd.

The ETF’s total expense ratio (FYTD) stands at 1.73%, illustrating the costs associated with managing the fund. The management fee is reported at 0.65% per annum, with the trustee services provided by the Central Depository Company Pakistan Limited and auditing by BDO Ebrahim and Co.

Despite the fund’s impressive performance, it operates with a high risk of principal erosion, as indicated by its risk profile. The standard deviation of 18.35% and a Sharpe ratio of 3.88 further highlight the fund’s volatility and risk-adjusted return potential.

In summary, while UBLP-ETF has shown strong growth and resilience in the market, investors should remain aware of the high-risk factors and consider their risk tolerance before investing in such funds.